President Donald Trump is mandating federal agencies pay more attention to the buy-American rules on the books. The president is expected to sign an executive order April 18 requiring agencies to conduct a top-to-bottom assessment of the procurement rules and get rid of any loopholes that would give foreign products an advantage over American ones.
The Buy American, Hire American order is part of Trump’s campaign promise to promote American workers and American manufacturing.
The Hire American part of the executive order requires agencies to review and administratively strengthen the rules around work visas such as H-1B.
“The buy-and-hire rules have been diluted over time,” said a senior administration official during a briefing on April 17. “The buy-America waiver and exemption process has resulted in lost job opportunities for American workers, and the hire-American visa and labor policies have been unenforced or rendered inoperative.”
Under the Buy American section of the order, the White House is taking on three separate legislative provisions — the Berry Amendment, the 1994 provision in the Defense Authorization Act, the 1933 Buy American Act and the Buy America provisions of the Recovery Act — and addressing what senior administration officials say are much-needed fortifications.
“The EO ushers in a more muscular buy-American policy. We are maximizing made in America,” the official said. “Every agency will conduct a top-to-bottom assessment and root out every buy-American loophole. Then, the Commerce Secretary will coordinate efforts and advise how to close those loopholes.”
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The official said the executive order also will require Commerce and the U.S. Trade Representative to look at how the government issues waivers to buy American in free-trade agreements.
“If it turns out America is a net loser because of a free-trade agreement, and there are agreements with 60 countries, they may be renegotiated,” the official said.
The official outlined the four main points of the order:
Directs every agency to monitor, enforce and comply with buy-American laws. The official said this is the Trump administration’s highest priority when it comes to spending taxpayer dollars.
“Agencies will be held strictly accountable for any failures,” the official said. “Each will conduct a top-to-bottom review of buy-American rules, including the use of waivers and exemptions, and provide recommendations to strengthen buy-American.” The official said recommendations are due to the president in 220 days.
Require agencies to use waivers and exemptions to buy-American judiciously, and mandates that only the head of an agency can issue a waiver. Agencies also should consider when looking at bids whether a foreign source of products has been dumped or otherwise subsidized to create an unfair low bid.
The government will enforce buy-American rules. The official said there is some evidence that shows the role of free-trade agreements in weakening the buy-American laws. “Previous administrations have waived buy-American rights with trade deals,” the official said. “Through these deals, foreign companies are treated just like Americans in the government procurement process. The idea was America would pick up as much or more in foreign government markets, but there is compelling evidence, such as a February 2017 report from the Government Accountability Office, that suggests the U.S. may not be getting a fair share of the foreign government procurement market through fair trade agreements.” In the report, GAO found as of 2010, the most recent data available, the U.S. opened up $837 billion to foreign companies, which was five times more than the next five countries — the European Union, Japan, South Korea, Norway and Canada — opened up to U.S. firms. The official said the order calls for the Commerce Secretary and the Trade Representative to consider renegotiating these trade agreements if further analysis shows the U.S. isn’t getting a fair deal.
Reaffirms the standards for steel production.
The hire-American part of the order would direct the departments of Homeland Security, Justice, Labor and State to propose new rules to prevent immigration fraud and abuse. Those departments would also be asked to offer changes so that H-1B visas are awarded to the “most-skilled or highest-paid applicants.”
The White House said the program is currently undercutting American workers by bringing in cheaper labor and said some tech companies are using it to hire large numbers of workers and drive down wages.
Congress is considering several bills to overhaul the visa program. One, introduced by Sens. Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa), would require companies seeking H-1B visas to first make a good-faith effort to hire Americans, a requirement many companies can dodge under the current system; give the Labor Department more power to investigate and sanction H-1B abuses; and give “the best and brightest” foreign students studying in the U.S. priority in getting H-1B visas.